Giordano chairman rejects Chow Tai Fook's sale offer

Hong Kong-based apparel company Giordano’s chairman Peter Lau has refused to sell his stake to Chow Tai Fook Enterprise, which previously offered to acquire the clothing retailer. According to the public announcements of Giordano, Lau and executive director Chan Ka Wai do not intend to accept the share offer. Lau further explained in the press conference of Giordano's interim results that the reason behind his rejection is due to his personal financial management. He added that there is no need to cash out at the moment, hence he doesn't see a reason to sell his stake.

Chan also agreed with Lau's statement and said he remained cautious about the recovery of Hong Kong's market for the second half of the year unless the border reopens.

However, another executive director Mark Alan Loynd intends to accept the offer in respect of share options held by him with an exercise price of HK$1.39, being a total of 3,000,000 share options. He does not intend to accept the share offer in respect of share options held by him with an exercise price above HK$1.39, being a total of 6,064,000 share options.

Back in June this year, the family of billionaire Henry Cheng Kar Shun lodged a takeover bid control for the famous apparel retailer Giordano International, in a deal worth as much as HK$2.56 billion (US$326 million).  According to a document filed with the stock exchange, the family’s offshore unit, Clear Prosper Global, offered to buy 75.4 % of Giordano International which does not already own for HK$1.88 per share. The offer includes HK$34 million worth of outstanding stock options.

In a joint statement filed to the Hong Kong Stock Exchange on 23 June 2022, the Chengs and Giordano said the family's investment vehicle had offered to spend as much as HK$2.55 billion to buy all outstanding stock and share options under the Chengs' existing 24.6% leading stake. The Chengs' offer of HK$1.88 a share is conditional on reaching 50% acceptance among Giordano shareholders. Henry Cheng and his family stated in the announcement that they would seek to preserve Giordano's market listing, which would require at least 25% of shares to remain in public hands.

“The offeror intends to work together with the company’s management to review the structure, operation and business of the group with a view to enhancing and strengthening its business by, amongst other matters, taking advantage of the extensive network and experience of the offeror’s group companies and affiliates, especially in the retail sector,” the stock exchange filing said.

David Webb, a local shareholder rights activist who holds a 5% stake in Giordano, said in a tweet: "The Cheng family's cheeky HK$1.88 bid for Giordano is far below fair value, an attempt to preclude a competitive bidding process by reaching 50% before the retail recovery." He also added that "shareholders should reject and management should invite competing offers. Let the action begin."

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